How to make money in car rental business?

How to make money in car rental business?

Are you new to the car rental business? Or how long have you been into it? The car rental business is so much affected by the market, economy, and the conditions around it. Even during the pandemic, this industry was harshly affected. But remember this is not permanent.

There are some factors that you have to keep in mind to know how to make money in car rental business. Given below are the factors, using which you can analyze this business and predict money you can make with your car rental business.

Analyze the rental market

As you know, the car rental business offers different categories of cars to the renters for various spans of time, mostly less than 12 months. Cars are rented on a daily, weekly, or hourly basis as per the renter’s convenience. The car rental business is highly benefitted by the tourism industry as most of the tourists still depend on the rentals for wandering around the new city. 

Other than tourism, it is mostly used for airport transport, local market transport, and insurance replacement. In the United States, both of these markets account for 73% of the total rental revenue. Whereas, insurance replacement market accounts for the remaining 27%.

how to make money in car rental business
Analyze the car rental market


The money you can make with your car rental business also depends on the economy. People consider it as a curse to the rental industry but you can still consider it as an opportunity. It is because the safety measures taken for COVID has made people choose rented vehicles over public transport. So think positive and see the positive results.

The number of all rental vehicles was found to be 1.7 million in the United States in the year 2001. But has doubled over decades. In 2019, the total revenue generated by this industry was found to be $31.87 billion annually crossing the revenue of $30.27 billion annually as per the data surveyed by Auto Rental News.

How to make money in car rental business?

Most of the car rental companies keep a car for 2-3 years and then replace it with the new model by selling the old one. Now the profitability of the vehicle depends on the fact that it must be rented for more than 70% of the time within this period. If you have a good marketing plan and sales strategy, you can achieve maximum vehicle usage.

Being a business owner it is your duty to check that each of your vehicles runs a mileage of 60,000 miles, the general mileage warranty given by the manufacturers. It means the more your vehicle runs, the better it will be. Keep your focus on generating more revenue to cover the expenses for insurance, employee salaries, maintenance, and much more.

Some other ways by which you can boost the efficiency and profit gained by each carby including this in your vehicles:

  • GPS tracking,
  • Prepaid fuel,
  • Delivery of the rental to the renter’s specified location,
  • One-way trips, etc.

Set your rate as per the competition in your service area which further determines the profit earning per vehicle. You have learned with experience how to make money with your car rental business, your profit margin can easily reach upto 6% to 10%. Other factors affecting your business are:

  • Location of business, 
  • Varieties of vehicles you own
  • Digital marketing of your website and app,
  • Fleet management software, etc.

Expecting the earning of $45 a day with 80% utilization, the total revenue generated by the vehicle will be $1,012.50 per year. If you include extra services in your business like delivery to your customer’s specified address, car seats, post-trip cleaning, prepaid fuel, one-way trips, you can expect an extra earning of 10% per month.

Tracking profitability of car rental business

The profitability of your business can be measured by the gains after all the expenses are paid. Most car hire companies can earn these gains after a few months of entering the market. After a few months, paying all the expenses including inspections, maintenance costs, employee salaries, insurance policies, and other costs, you will still be left with good profit. 

Considering all your expenses into account, you can keep $150 extra per month specifically for unforeseen expenses. The value will differ as per the rates at which you offer the vehicles and the area of your operation. 


We cannot specify the exact figures for the profit you can earn per month as it varies with many factors. The car rental business starts with just 3 to 4 cars and has a huge potential to grow into a large fleet rental business. But be careful as it takes 1000s of dollars to own a car and get 10s or 100s of renting value in return which varies with daily bookings. So it takes time for the car rental business to become the talk of the town.

All of your success depends on a good marketing plan, providing good customer service, reaching new customers, and being loyal to the existing ones. Though the car rental industry has seen a breakdown during pandemics that's, not the end. It's going to stay forever. Many people still choose rentals over public transport. So the answer to your question that “how to make money in car rental business?” depends on several factors

So don’t wait and kickstart your car rental business and seize this opportunity.

Hit the comment section with your views. If you have any queries, doubts, or requests, do not hesitate to email them at For more updates, deals, tips, and hacks about the fleet management systems follow us on Instagram and Facebook. Thank you for staying here with us.

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